BENGALURU: Karnataka Chief Minister Siddaramaiah announced a waiver of crop loans and short-term loans of up to Rs 50,000 availed from agricultural cooperative banks across the state. He has now joined the only three states- Uttar Pradesh, Maharashtra and Punjab, to announce waivers in a bid to offer some relief to distressed farmers following a crash in prices of farm produce. The CM said, “While some farmers have obtained interest-free loans to the tune of Rs 25,000, others have availed up to Rs 300,000. We'll waive off loans up to Rs 50,000, irrespective of the total loan amount.”
Speaking in the legislative assembly, he said, “I want the Centre to waive off farmer loans availed from nationalised and commercial banks.” Siddaramaiah said Karnataka was the first state in the country to transfer input subsidies directly to bank accounts of farmers. The loan waiver is believed to benefit 22,27,506 farmers who have taken loans worth £1.07 billion from cooperative banks. “Consecutive droughts have pushed the farmers into a distress situation. The burden of repayment of loans is becoming unbearable for the farming community and we need to respond. We know it will impact our finances, but we are going ahead with it.”
Karnataka's move assumes significance as it comes in the backdrop of two political developments: One, Union finance minister Arun Jaitley's statement that the Centre wouldn't fund any waiver of farm loans by states; Two, Congress vice-president Rahul Gandhi expressing his solidarity with the farming community by demanding Prime Minister Narendra Modi waive farm loans. Seen as a favour to the agricultural community, the move is also expected to win the farmers' goodwill towards the Congress government which is heading towards elections.
